Since the overhaul of the American tax code at the end of 2017, financial advisors have reported that almost 50% of their clients have increased their charitable donations.
The Tax Cuts and Jobs Act has had the effect of boosting the inclusion of philanthropic strategies into more business models.
Apart from the financial benefits of charitable giving, there are many other reasons for businesses to embrace philanthropy.
For some business owners, it may be to share their success, having been the recipient of charitable grants or donations that helped them raise enough capital to finance a business.
Others simply want to inspire their employees, and make a positive contribution to the local community.
Making Valuable Connections
Giving to charity is a great way to help the community and connect a business to the local neighborhood. Successful CEOs like Ryan Hibbert of Riot Hospitality Group aren’t all about making profits.
Through a new restaurant, his management company has donated money to a veterans non-profit, so engaging directly with local people and giving back to the community.
Charitable donations like this are a positive way to connect a business to the local community.
In return, the public will notice and appreciate a company that is making the effort to treat them as individuals, and the causes they care about with respect.
The two-way relationship extends to the charities themselves, who may acknowledge donations and voluntary work by publicizing support, and this, in turn, can help promote the business.
In addition all these connections can lead to networking with other businesses and meeting other established philanthropic organizations, often very powerful companies.
Financial Benefits Of Donating
Although philanthropic acts are undertaken with altruistic intent, they can also result in financial benefits for a company.
As long as the beneficiary of a charitable donation is a 501(c)3 organization, then any donation will qualify for a tax deduction, although the amount deducted may not match the total value of the donation in every case.
Many businesses find that an indirect effect of charitable donations is increased awareness of their brand and improved customer satisfaction, so leading to better sales and higher revenue.
Boosting Employee Morale
When a company donates to charity, 57% of employees believe this helps boost moral at work.
People are proud to work for a company that is a positive force in the community, and they tend to have a higher regard for their corporate leaders.
This leads to higher retention rates, as workers are more motivated to work for generous and supportive bosses.
As well as keeping existing employees happy, through supporting charities, businesses can also attract and add new talent to their workforce.
Successful corporate leaders understand that incorporating philanthropy into an organization’s business model is good for business.
As well as benefiting financially, they set a good example, boost employee morale and, most importantly, make a positive contribution to the local community.